How To Reduce Your Monthly Credit Card Statement

How to Reduce Your Monthly Credit Card Statement

Your monthly credit card statement can serve as an accurate snapshot of your personal finances. If you're maxing out your credit card every month without paying the balance in full, you are probably spending a good chunk of your disposable income on credit card interest. Fortunately, you don't have to just accept it. You can reduce your monthly credit card statement with the help of these seven tips.

Set A Strict Budget

One of the main reasons why you're probably maxing out your credit card every month is because of your budget or, more specifically, the lack thereof. An effective budget plan keeps you from spending money you can't afford to spend, at least not until you repay off outstanding debt. For instance, set a monthly budget of $2,000 to cover rent, groceries, and utilities. If you find yourself checking out a new shirt or electronic device online, ask yourself - do I have enough money left over in my budget to pay for this luxury? If the answer is no, simply add it to your online shopping cart for next month.

Cut Your Credit Cards

You don't have to be overly dramatic and actually cut the cards with a pair of scissors. You don't have to freeze the credit card in a block of ice, either, like you've seen it done on television. Cut back on your credit card use by only maintaining one active card instead of multiple ones. Too many credit cards can tempt you to purchase goods on a line of credit rather than just wait patiently and save up for it. Start using your debit card and cash only, particularly when paying for products or services that are considered a luxury rather than a necessity.

Take Advantage of Rebates

If you are going to charge a transaction on your credit card, make sure you're getting rebates for it. In a nutshell, a rebate is any discount awarded to consumers at the time of sale. Rebates may also be sent to the consumer after they have paid for the product or service in full. Most businesses today offer their own in-house rebate program. For instance, the Walmart rebates program was recently launched and can be used on hundreds of products on Walmart's website or physical stores.

Increase Your Earning Potential

It's common sense - the more you make per month, the less likely you need to use your credit card to pay for purchases. And even if you do decide to use your credit card, i.e. when you are trying to earn or boost your credit score, it's easier to repay the outstanding balance. Increase your earning potential by pursuing a higher-paying job, building side-businesses, and doing part-time independent contractor work.

Automate Your Card Payments

Almost every credit card company today offers a payment automation feature that lets you schedule credit card payments at fixed monthly intervals. Automating your monthly credit card payments minimizes the risk of missing one and getting charged a late fee by your credit card company. Late payment fees may seem insignificant in amount but can add up to a considerable sum over time.

Seek Professional Financial Help

Credit counselors and financial advisors can be useful, particularly if you rack up huge credit card debt every month. These professionals provide a range of financial services, from basic money management tips to setting up an actual repayment plan for your loans and credit cards. In some instances, a credit counselor may also be able to renegotiate your credit card interest rate and monthly payments, so it's easier to keep up with the debt.

Purge Unnecessary Expenses

Let's face it, there are expenses on your monthly credit card statement that you can live without. Whether it's a subscription to multiple on-demand content streaming services or that $8 coffee at your nearby cafe, consider cutting back on these expenses or, better yet, completely eradicating them from your budget.

Once you've reduced your monthly credit card statement to zero, apply the financial habits you've learned here to improve your personal finances further. Note that the aforementioned tips are not just applicable to credit card debt, they can also help you accumulate wealth over time without you even noticing any drastic lifestyle changes.

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